Porters Value Chain Analysis www noteslearning com Introduction

Porter’s Value Chain Analysis www. noteslearning. com

Introduction ❑ Value chain represents the internal activities a firm engages in when transforming inputs into outputs. ❑ Value Chain Analysis (VCA) is a strategy tool used to analyze firm’s activities by recognizing which activities are the valuable to the firm and which ones needs to be improved. ❑ It involves identification of primary and supportive activities that add value to the final product. ❑ Michael Porter introduced Generic Value Chain Model in 1985. www. noteslearning. com

Porter’s Value Chain Analysis S U P P O R T P R I M A R Y Firm Infrastructure (Financing, Planning, Investor Relation, Organizational Structure) Human Resource Management (Recruiting, Training, Compensating, Grievance handling) Technology Development (Product Design, Testing Facility, Market Research, Enterprise Resource Planning) Procurement Resources (Components, Machinery, Vendor, Advertisement, Services) Inbound Logistic Operations Outbound Logistic Marketing And Sales Service Receiving Manufacturing Warehousing Advertisement Data Storing Assembly Order Fulfilment Selling Customer Service Inventory Control Testing Dispatch Promotion Daily Operation Transportation Pricing Transportation Scheduling www. noteslearning. com Upgrading Training M A R G I N

Primary Activities Primary activities are directly involved in transforming inputs into outputs and in delivery and after sales support. ▪ ▪ ▪ Inbound Logistics – Raw Material Handling and Warehousing Operations – Transforming Inputs into the Final Products Outbound Logistics – Warehousing and Distribution of Finished Goods Marketing & Sales – Communication, Pricing and Channel Management Services – Installation, Repair and After-Sales Support www. noteslearning. com

Value Chain of LLOYD AC. Inbound Logistics ▪ ▪ ▪ Installation Repair After Sales Servicing ▪ ▪ ▪ Purchase of Raw Material & Components Services & Support Operations PRIMARY ACTIVITIES Segmentation Marketing and Sales Targeting Branding Pricing Advertising Promotional Offers Outbound Logistics www. noteslearning. com Manufacturing of A. C. into a finished product Transporting A. C. to Distributors and Wholesalers

Porter’s Value Chain Analysis S U P P O R T P R I M A R Y Firm Infrastructure (Financing, Planning, Investor Relation, Organizational Structure) Human Resource Management (Recruiting, Training, Compensating, Grievance handling) Technology Development (Product Design, Testing Facility, Market Research, Enterprise Resource Planning) Procurement Resources (Components, Machinery, Vendor, Advertisement, Services) Inbound Logistic Operations Outbound Logistic Marketing And Sales Service Receiving Manufacturing Warehousing Advertisement Data Storing Assembly Order Fulfilment Selling Customer Service Inventory Control Testing Dispatch Promotion Daily Operation Transportation Pricing Transportation Scheduling www. noteslearning. com Upgrading Training M A R G I N

Support Activities ● Firm Infrastructure refers to an organization’s structure and its management, functions, planning, accounting, finance, quality-control mechanism. Firms infrastructure can be a powerful factor for competitive advantage. ● Procurement Resources refers to the function of purchasing inputs used in the firm’s value chain. This function adds value to the company by employing required inputs and effectively managing the firm’s cost. www. noteslearning. com

Support Activities ● Technology Development incorporates a wide range of technology-related activities to improve the product and the process. Technology development plays a prominent role in differentiating and having competitive advantage ● Human Resource Management consists of activities involved in recruitment, hiring, training, development, compensation of all type of human manpower. It supports both the primary activities and the entire value chain. www. noteslearning. com

Need for Value Chain Analysis ● Cost Advantage ● Competitive Advantage ● Profitability Value Chain Competitive Advantage www. noteslearning. com Higher Profitability

Support Activities: The Coca-Cola Company ● Firm Infrastructure ○ 800 plants over 200 countries and territories ○ Market Capitalization: $235. 35 Billion ○ Advertisement : $5. 8 Billion ○ Largest Distribution Network ● Procurement Resources ○ Coca-Cola Bottlers’ Sales and Service ■ Customer Business Solution : a data and service integrator of/for stakeholders ■ Procurement: Navigate external marketplace channels and categories and supplier insights to solve client needs. www. noteslearning. com

Support Activities: The Coca-Cola Company ● Technology Development ○ Product Innovation: Sugar free products, Greener packaging ○ Sustainable Innovation: “Zero-Waste Urban Environment” ○ Marketing Innovation: Digital Platform and Big Data Analysis for accessing customers choice and forming strategies accordingly. ● Human Resource Management ○ Payments and Rewards ○ Employee Engagement Programs ○ Trainings and Education ○ Performance management www. noteslearning. com

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